Nucleus Research Fri, 19 Dec 2014 21:50:01 +0000 en-US hourly 1 Net Neutrality and Guinness Wed, 17 Dec 2014 15:43:52 +0000 Net neutrality is an issue that’s generated a lot of interest, and more than its fair share of blog posts. I’m loathe to add to the discussion but I was on the Acela train travelling back from NYC this past week and the topic came up among three of us at a table. The fourth person, by the way, was an artist somewhat disinterested in the topic. My two seatmates felt the content provider (Netflix, Amazon, etc.) should compensate the Internet provider (Verizon, Comcast, etc.) for the “extra bandwidth” they used. As you might imagine, I was amazed at their position.

The FCC (and by FCC I mean bureaucrats with slightly flexible ethical centers and future employment opportunity with the companies they oversee) is mucking around with the issue but I see it as an FTC rather than FCC problem. I’m paying for bandwidth (and let’s face it, on even the best days I’ve yet to see the download speed I’m promised) for that last mile and I expect to use it for anything I want. In the somewhat Alice-in-Wonderland logic of the FCC the Internet provider might have the right to charge for that same bandwidth both to me and to the content provider. Really?

Imagine walking into a bar and ordering a pint of Guinness. You order from a surly bartender who, despite the “we care about customer service” signs everywhere, outwardly hates you and demands you pay for your beer a month in advance. Now instead of a pint of the wonderful dark ale with bubbles flowing in the wrong direction he slides you a shot glass full of PBR. The explanation is that Guinness isn’t paying as much as PBR to “send” the beer to you and they are using shot glasses instead of pint glasses to better “manage” the workload on the dishwasher. Still, you need to pay full price. Imagine that happening in a bar in South Boston and what would happen to the bartender.

So let’s please end this net neutrality discussion and ensure that all Internet traffic is treated equally. It’s critical to the future of technology. There’s no “other” point of view on this topic.

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The Internet of Things Mon, 15 Dec 2014 16:39:46 +0000 There’s lots of talk about Internet connected devices. Some of the ideas are clever, some just interesting, and some of them remind me of Disney’s 1950’s–style Carousel of Progress ride. Let’s put aside the issues of security, privacy, and processing power and look at IoT from a bottom line point of view. Just because you can do it, doesn’t mean it has value. On the clever and useful side of the scale there’s health monitoring. Let me know when a device is about to break and I can avoid downtime while extending the operating life of the device. I’m increasing the “predictive” part of predictive monitoring and I can put a number on the value that delivers.

For just interesting ideas there’s energy use and the ability to communicate with the energy company to better manage draw. I’m not sure if the initial cost will be offset by the saving but over time it’s likely to deliver a benefit. In the case of the City of South Bend Indiana, we found they received a 123% ROI (m165 – IBM ROI case study – City of South Bend) when they used IBM Intelligent Operations Center with the city’s smart valves and sensors helped the city to gather and analyze sewer system data more efficiently.

On the “Carousel of Progress” end of the scale there’s the now cliché example of the refrigerator that orders food. That sounds great except it needs access to my travel schedule and I’m now tasked with keeping my refrigerator informed when I book a flight or decide to stay out late. Sure it may work, but it’s like the promise of the smiling 50’s housewife in an apron, pressing a button for food to magically appear. In reality she probably spent the 50s watching soap operas with a martini in her hand. The problem is that IoT is attracting self-proclaimed “futurists” like bugs to a bug light and generating lots of hype. If there’s one thing I know about futurists is that they rarely predict the future.

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The Future of Omnichannel Engagement Mon, 25 Aug 2014 17:26:08 +0000 There’s been a lot of hype about omnichannel customer engagement over the past few years. That’s because many people are realizing that after fixing the internal issues with shiny new CRM systems, integration, and analytics, there’s still the pointy part of the sale when you actually touch the customer. Most of the omnichannel messaging has come from CRM vendors that seek to bring siloed processes and databases together so companies can more intelligently engage with their customers. However, in the business-to-consumer world, engagement is about a lot more than just CRM. Nucleus has been following the evolution of Episys’s digital signage and content solutions for some time and has seen the company’s success in driving better, more consistent customer engagement. Our VP of research, Rebecca Wettemann, will be part of Episys’s North American roadshow in September where she’ll be sharing the latest thoughts on the Four Stages of Omnichannel Maturity for retailers. To learn more, you can contact Episys directly at

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Is OpenText giving away the ECM farm? Mon, 21 Jul 2014 19:14:04 +0000 It looks like OpenText is trying a new strategy to keep its customers happy: giving away its solutions for free. This month the company announced for the second time in two months that it was giving new and existing customers the opportunity to download Tempo Box, its file sync and sharing solution. Now, this could be a generous gesture by OpenText to help its customers share files safely. Or, the more likely thought process is that the behemoth company is finally feeling the pressure of simpler, more nimble ECM and file sync and sharing services creeping into the enterprise space.

With Box, DropBox, and Microsoft all making inroads into the enterprise with easily deployed, cost-effective solutions, why wouldn’t OpenText be nervous that customers would start to defect to solutions that their employees already know how to use at the consumer level. Last year OpenText posted the first decline in license revenue in more than ten years. It’s no secret that the multitude of names for its solutions is confusing to even the most well versed ECM pundits, so as other vendors streamline and simplify their solutions to make deployment and adoption easier, the company is looking for a new carrot to entice its current customers to stick around. It looks like, for OpenText, that carrot is free pieces of its solutions to keep customers from taking their business across the street (read the report).

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Taking the Dark Cockpit to mobile devices Mon, 07 Jul 2014 15:49:08 +0000 Last year we started talking about the Dark Cockpit as an aspirational design model for enterprise software, and how software vendors should be investing in development that simplifies, focuses, and automates business tasks by using the intelligence of software (read the report). We’ve seen a number of vendors beginning to take the Dark Cockpit guidance to heart, with announcements of capabilities that deliver focused, actionable information to users in context.’s announcement of Salesforce1 Mobile Reports and Dashboards is one. It’s a big step forward for Salesforce, who has typically relied on partners to deliver advanced analytics for its CRM. It also takes the Dark Cockpit to mobile devices, with customizable dashboards and reports that are optimized for mobile devices – driving even greater productivity than the 14.6% increase we measured in 2012 (read the report).

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Let’s look at IRR again… Wed, 18 Jun 2014 20:36:22 +0000 Internal Rate of Return (IRR) does not measure the return of a project. That’s a fact. Don’t let the word “return” fool you. IRR is not the value of a project but rather the interest rate that sets the NPV equal to zero. There are issues with NPV notably that without a residual value at the end of the period the number will be artificially low. This is especially true for technology projects that are ongoing and have no fixed end point. IRR is useful, but only to the extent you are using NPV properly to assess a closed-end project and need to interest rate above which the project no longer makes sense. Examples might be when you are borrowing money and need to negotiate with the bank on the rate. IRR tells you your break-even point. Another example may be comparing projects that can be undertaken in different countries. Comparing the project IRR to the cost of capital in those countries tells you which countries make sense for the project. But the bottom line remains the same. IRR is not ROI. If it were ROI, it would be called ROI. It’s not. It’s called IRR. Completely different.

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When being nice doesn’t pay Tue, 27 May 2014 14:00:50 +0000 I’ve said before that the role of IT and even the title of CIO is changing to a support rather than a critical corporate function. I had a chance to speak with a few human resources folks a few weeks ago and an interesting discussion highlighted one factor for the benefit of cloud and the diminishing role of corporate IT. These non-technical line of business folks were looking for a technology solution to help them solve corporate challenges. They understood their roles, and understood the problem they faced. How the underlying technology worked didn’t matter as much as solving the problem. For these folks, cloud-based solutions made it easy to focus on the end result and using outside experts to help with configuration was preferred to internal IT.

One comment was interesting. With on-premise applications, corporate IT took a greater role in the deployment. Sometimes that was good, but there were times when the end user had to be nice, and that limited the final solution. When a consultant complains about a change the answer they receive is usually too bad, if it’s in the contract then get it done. When a colleague (as distant as IT might be) complains (even subtly) the inclination is sometimes to compromise. The report they need from IT might be good, but not great, or worse, they might be more likely to minimize their demands. Does it happen often enough to impact value? Not likely. But the comment was interesting, they can be more demanding when outside consultants are configuring rather than internal IT folks developing. Surveying your own employees on how forceful they are with internal IT might yield interesting results.

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Old versions and tracking the value curve Tue, 20 May 2014 14:00:43 +0000 Cloud applications deliver value. We looked at the numbers and found a 1.7 times greater ROI when an application is delivered as a cloud service versus an on-premise solution (here). Old news, and well-worn territory, but among the benefits, and there are many, SaaS-based applications allow the organization to closely track the value curve, and that delivers competitive value.

Many organizations, if challenged, will reluctantly admit to being more than a few versions behind with their on-premise applications. Often these are the critical applications that drive and support the organizations. The excuse is usually testing but I think we all know it’s fear. Fear that an upgrade will upset the delicate balance of customized code and integration that keeps their critical applications running precariously. I have yet to find a CIO who confidently uses the word “robust” to describe their environment.

The problem from an ROI point of view is the stair step value curve. If we consider the value curve rising to the right as new versions are released, the organization that delays an upgrade loses out on new features for some amount of time. These organizations are delaying an upgrade until the benefit of the upgrade exceeds the total of cost of upgrade plus the fear that something will go wrong. Best case, with each upgrade they touch the value curve, but only for a moment as they then stay stable until the next push to upgrade. That stair step triangle is the lost value between SaaS and on premise due to version mismatch. Worse, on-premise applications have a longer cycle time between upgrades compared to SaaS applications, further increasing the benefits of SaaS over on premise.

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Lotus F1 Team and Microsoft – speed matters. Mon, 12 May 2014 10:00:12 +0000 A quick thank you to the Lotus Formula 1 folks for hosting Rebecca and me in Enstone UK last week. For those of you who don’t follow Formula 1, it’s considered the pinnacle of motorsports, where the technology is arguably as important, if not in some cases more important, than the drivers. Annual team budgets are in the hundreds of millions of dollars, teams employ hundreds of people, and in the case of the Lotus F1 team, they have a data center that would be the envy of any organization. All of that money and personnel is focused on a single objective: eliminating fractions of a second from a lap time. And that’s where Microsoft Dynamics comes in. Rebecca and I have visited hundreds of companies over the years and measured the value technology delivers across a wide range of organizations, from fork lift manufacturers in Mississippi to light bulb manufacturers in Finland. Of all of the organizations, the Lotus F1 Team was the most focused on how technology and its close partnership with Microsoft can drive the end result – going faster.

Microsoft Dynamics, Office 365, and Surface devices were all used (or in development) to streamline the processes within Lotus and tie the team at the racetrack back to marketing, PR, development, and raw materials ordering at the factory. Why is this so important? A problem on the racetrack (say, a clutch problem, for instance) can be quickly traced back to the stocked parts at the factory and corrected before those parts are used at a future race. Data can be analyzed (and they generate 25MB per lap) more efficiently and changes can be identified and implemented. Small things matter, and in this highly competitive sport locked in constant development where new parts are finely crafted from exotic material or printed in 3D printers, any delay in information flow is time lost against competitors.

And it’s not just the time lost at the factory. Increasing the efficiency of technology frees up money spent on IT for use in other development activities. For a team looking to gain over 2 seconds a lap this year, that means that yes, for the Lotus F1 Team, using Microsoft will play a part in ultimately making their car faster. And in Formula 1, that is the only measure that really matters.

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Episys and the drive to Omni-channel Fri, 09 May 2014 14:00:19 +0000 I had a chance to meet with the folks at Episys and came away impressed with their technology. For those not immersed in the retail world, omni-channel has been a buzzword for some time.   In short, retailers have recognized that the buying experience needs to be consistent across physical and virtual worlds. The consumer may explore online, visit the store, and while there compare using a mobile device. They might order online and pickup in the store, or purchase online and return through the store. The only way to ensure consistency in pricing and messaging is with a single unified back end that supports multiple channels. Episys does this nicely from the home office out to the virtual channels and the physical channels down to the actual signage in the physical store.

There’s a lot of measurable value here.

Start with a better buying experience leading to increased sales. Add the value of reduced pricing and marketing mistakes. Now include the increase in productivity for the marketing teams that have a single way to push information through all channels.

A future benefit is the ability to build on the capability and react to changes in the market. For instance, when the Red Sox win the World Series this year, Home Depot (an Episys client) could have an immediate sale on Fenway Park green paint with an option to order online and pick up in the store. For retailers, who all exist on thin margins, this rich customer experience is easily accomplished with Episys. For customers, it’s a less frustrating buying experience with greater options.

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